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sec. 1.1368-1(f)(5), Proposed Income Tax Regs., 57 Fed. Reg.
24435 (June 9, 1992). Thus, the regulations also allow for a
taxpayer to make the election on an amended return. EMFI did not
attach an election statement in respect to section 1368(e)(3) to
its Form 1120S nor did it file an election with an amended Form
1120S.
Notwithstanding the fact that EMFI did not file an election
statement with the Secretary under section 1368(e)(3), respondent
argues that we should apply the doctrine of substantial
compliance to find that EMFI elected to treat all distributions
in its fiscal year ended October 31, 1993, as taxable
distributions of earnings and profits. Petitioners argue that
respondent may not invoke the doctrine of substantial compliance
to create a binding election when the taxpayer does not make and
file an election in accordance with the Secretary’s requirements
and procedures.
Historically, this Court has, under limited circumstances,
excused taxpayers from strict compliance with procedural
regulatory requirements as long as the taxpayer "substantially
complied" by fulfilling the essential statutory purpose. See,
e.g., American Air Filter Co. v. Commissioner, 81 T.C. 709, 720
(1983); Tipps v. Commissioner, 74 T.C. 458, 468 (1980); Taylor v.
Commissioner, 67 T.C. 1071 (1977); Hewlett-Packard Co. v.
Commissioner, 67 T.C. 736, 748 (1977); Sperapani v. Commissioner,
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